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DO you really lose money if u take the annunity over the lump sum?

Topic closed. 125 replies. Last post 4 years ago by rdgrnr.

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Posted: August 15, 2012, 11:03 am - IP Logged

Perhaps with a re-election and a "mandate for Marxism" it will be time to outlaw "hate speech" against our beloved governmental powers?

                                         

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    NY
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    October 16, 2005
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    Posted: August 15, 2012, 11:32 am - IP Logged

    Informative post, thank you.  It confirms my thoughts about the annuity option, that it's not the fool's choice so many here would have you believe (and that the cash option isn't the stone-cold lock it's portrayed as).

    This is not to say, though, that one should never take the cash or never take the annuity.  What I've been saying all along is that everyone has different wants and needs, so what would be a good decision for one person might be a bad decision for another.  For some people it makes sense to choose the lump sum, and for other people it makes sense to choose the annual payments.  Don't let anybody bully you into doing what you don't want to do.

    It's hard to go wrong with an annuity that will pay $1 million or more for 20 to 30 years. The lottery gets to invest the cash value without paying any taxes on it. The winner who takes the cash only gets to invest the 55 to 65% they get after paying taxes. That means that to generate the same annual income the winner need to get 1.5 to 1.8 times the rate of return that the lottery gets. Of course the lottery annuity is a conservative investment because they want to make sure the investment doesn't lose value. The people who sell annuities hope to make a lot more than they pay out. They'll take a minor risk of losing money, but they're not going to offer an annuity based on the hope that a bunch of high rate high risk investments will pan out.

    That means that it's not hard to find opportunities that offer the potential to yield a significantly higher rate. If you took the cash value in 2007 and invested it in Netflix you could have earned about 12% in the first year, nearly 100% the second year, and 200% the year after that. Of course you could also have taken the cash in 2010, invested in Netflix, and lost about 60% over the following year. That's the problem with all those plans the optimists have to take the cash and invest at a rate that's so much higher than what the lottery annuity offers. One is guaranteed, and the other isn't.Especially with the low rates that today's annuities are locked into there are a lot of advantages to taking the cash, but it depends on what your own needs and wants are.  Especially if you're not likely to outlive the annuity payments there's a lot to be said for avoiding the hassles of managing a big investment, and just cashing the checks as they come in. It's also a bit harder to spend your principal when you're not in direct control, though it will certainly be easy to borrow against it. Whichever way you go, it's your future decisions that will matter the most.

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      Milwaukee, WI
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      Posted: August 15, 2012, 12:37 pm - IP Logged

      billionaire2bee,

      Then why is the current PB JP of $305 Million given a cash value of $203.3 Million?

      By your theory it should be $152.5 million, no?

      As far as the $305 million, that's the 'advertised' jackpot. There is a differnce between advertised and cash option because there is no $305 million (or any other lottery game advertised jp) set aside by PB or any other lottery to pay a winner with.

      Yep, but by the time the government gets their hands on it, you're in the $120 million range.

      Only $120,000,000? I might have to apply for welfare!

      My calculator says: 213.3 mil cash works into 127 mill range.

      I bee verry verry happy!

      Now where do I put it.

      Annuity might not be there because of govt bankruptcy..

      Put it into a bank and unregulated banks do something stupid and my money ends up into the hands of the owners of the banks.

      I like Iowa farmland but that is slowly becoming desert land.

      Gold is great, but that could be stolen and the gold could fit into a Prius.....

      Seems nothing is secure anymore!

      What happened to the good ole days where you could just put it into a bank and sit on a beach and spend it?


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        Posted: August 15, 2012, 1:22 pm - IP Logged

        Yep, but by the time the government gets their hands on it, you're in the $120 million range.

        Only $120,000,000? I might have to apply for welfare!

        My calculator says: 213.3 mil cash works into 127 mill range.

        I bee verry verry happy!

        Now where do I put it.

        Annuity might not be there because of govt bankruptcy..

        Put it into a bank and unregulated banks do something stupid and my money ends up into the hands of the owners of the banks.

        I like Iowa farmland but that is slowly becoming desert land.

        Gold is great, but that could be stolen and the gold could fit into a Prius.....

        Seems nothing is secure anymore!

        What happened to the good ole days where you could just put it into a bank and sit on a beach and spend it?

        Your best bet is to invest into Jack Daniels. People drink that rot gut whether happy, depressed, suicidal, celebrating or just pretty much for

        any reason under the sun.  Cheers

         


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          Posted: August 15, 2012, 6:10 pm - IP Logged

          I will drink to THAT,,,,,,,,.......,,,,,,,,..........,,,,,,,..........,,,,,,

            rdgrnr's avatar - walt
            Way back up in them dadgum hills, son!
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            Posted: August 15, 2012, 8:06 pm - IP Logged

            Your best bet is to invest into Jack Daniels. People drink that rot gut whether happy, depressed, suicidal, celebrating or just pretty much for

            any reason under the sun.  Cheers

             

            Glad she didn't cut herself shavin'.


                                                         
                                 
                                                     

             

             

             

             

                                                                                                               

            "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                        --Edmund Burke

             

             

              mediabrat's avatar - 18z0typ
              upstate NY
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              Posted: August 15, 2012, 11:17 pm - IP Logged

              Careful med, your sounding a little like someone who is capable of independent thought.

              Your Marxist leaders will NOT approve of your move toward the "fringe"

              Oh, stop it.  "Disagrees with Ronnie" is not the same thing as "incapable of independent thought".  Nor does it mean "Marxist".  Roll Eyes

              Patriot


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                Posted: August 16, 2012, 10:49 am - IP Logged

                Oh, stop it.  "Disagrees with Ronnie" is not the same thing as "incapable of independent thought".  Nor does it mean "Marxist".  Roll Eyes

                Now that's the mixed up mediabrat we all know and love. You had me concerned with that rational and reasonable post about annuities.

                You may not be a Marxist mediabrat, and you may not be willing to admit that our leader is one, BUT HE IS............ and he has been from his youth, so its not too hard to decipher.

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                  NH
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                  Posted: August 16, 2012, 12:12 pm - IP Logged

                  Someone wins 100 million dollars and they start thinking about making more money out of it or trying to double it etc.  I say why bother if you don't know what you're doing. Most people don't belong in the stock market and know very little about investing. So they have to bring in people(strangers in more cases than not) to invest their money.  Why not just keep the money you have in the cash option and live off the interest of a few  % points in a CDAR'S account in many banks but with one simple acount number? You have all your money at your fingertips for anything you want at any given time.  And you're not worried about losing any of your money which is FDIC insured.


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                    Posted: August 16, 2012, 5:56 pm - IP Logged

                    Someone wins 100 million dollars and they start thinking about making more money out of it or trying to double it etc.  I say why bother if you don't know what you're doing. Most people don't belong in the stock market and know very little about investing. So they have to bring in people(strangers in more cases than not) to invest their money.  Why not just keep the money you have in the cash option and live off the interest of a few  % points in a CDAR'S account in many banks but with one simple acount number? You have all your money at your fingertips for anything you want at any given time.  And you're not worried about losing any of your money which is FDIC insured.

                    FDIC insures up to $100k and they may have changed it to $200k but either way thats all you get after a melt down.

                    There are 1000s of money managers out there.

                    Most will suggest putting your money into groups....

                    example

                    1. safe

                    2. semi safe.

                    3. risk.


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                      Posted: August 16, 2012, 5:58 pm - IP Logged

                      You could just buy gold and put in a safe deposit box in Jamaica man.

                        weshar75's avatar - Lottery-042.jpg
                        Mcminnville, Oregon
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                        Posted: August 16, 2012, 6:03 pm - IP Logged

                        Your best bet is to invest into Jack Daniels. People drink that rot gut whether happy, depressed, suicidal, celebrating or just pretty much for

                        any reason under the sun.  Cheers

                         

                        I'll take some of that single barrell.  It tastes very good going down.-weshar75

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                          Posted: August 16, 2012, 6:15 pm - IP Logged

                          I'll take some of that single barrell.  It tastes very good going down.-weshar75

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                            haymaker's avatar - Lottery-012.jpg
                            Egg Harbor twp.south Jersey shore
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                            Posted: August 16, 2012, 6:32 pm - IP Logged

                            Your best bet is to invest into Jack Daniels. People drink that rot gut whether happy, depressed, suicidal, celebrating or just pretty much for

                            any reason under the sun.  Cheers

                             

                            My reason was, just left the dentist office and the novacaine was wearing off.

                            Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.


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                              Posted: August 17, 2012, 2:46 pm - IP Logged

                              My reason was, just left the dentist office and the novacaine was wearing off.

                              Any excuse will do. lol.lol.lol.